The mosaic representation of subgrid cloud-radiation interaction is implemented in the radiation scheme of the NCAR Community Climate Model version 3 (CCM3) to investigate its impacts on global climate simulations. It is found that the CCM3 with the modified radiation scheme enables the use of more realistic cloud amounts as well as cloud water contents while producing net radiative fluxes closer to observations. The improved vertical distribution of cloud water path based on the cloud-resolving model (CRM) simulations increases the radiative heating in the upper troposphere over the tropics, which reduces the long-standing cold bias in the temperature field. Consequently, not only the representation of cloud-radiation interactions is more physically consistent and accurate, but also the climate simulations are significantly affected and improved.